Oil prices burst out of the gate this week, rising more than 3% on Monday. That rally pushed the U.S. oil benchmark, WTI, up to more than $52 per barrel, while the global benchmark, Brent, rose above $59 per barrel. For WTI, it was the highest close in five months, while Brent hit its best level since July 2015. What's noteworthy about these moves is that they pushed oil 20% above its bottom in June, which means crude is now officially in bull market territory.
As I suspected they might, three factors fueled that rapid recovery: Sinking oil inventories, accelerating demand growth, and slowing shale supply growth. Those same catalysts could continue to push oil higher, especially if OPEC remains steadfast in its commitment to keep a lid on output. That said, while the market is pinning its hopes on OPEC, the wild card for higher prices is shale, which has become the new swing producer.
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Source: Fool.com